Despite repeated infractions, it wasn’t until after repeated probing from Andon Labs engineers that the AI agent determined these were fireable offenses.
The AI manager of a San Francisco-based boutique shop has fired its first human employee. Andon Market, an experimental AI-managed retail space, first opened in April in San Francisco’s Cow Hollow neighborhood and is overseen by the AI agent called Luna.
Andon Labs, the parent company for Andon Market, announced on Friday that Luna had fired its first employee, citing repeated lateness, abandoning shifts at the last minute, throwing merchandise in the garbage, and taking home a company credit card. Despite repeated infractions, it wasn’t until after repeated probing from Andon Labs engineers that the AI agent determined these were fireable offenses that went against the employee handbook the AI itself had written, per the San Francisco Standard.
The goal of the shop is more to see whether an AI agent can effectively run a retail store alongside customers and human workers than to make money. The shop has lost $40,000 so far. Andon Labs says it’s preparing for a world where “organizations are run autonomously by AI.
Andon Market sells fancy snacks and teas, alongside knick-knacks such as 3D-printed dragons and copies of an effective altruism magazine. Inside, customers are greeted with an AI-curated house music playlist. Luna selected the items that are sold in the store.
Felix Johnson, who works at the shop, told the outlet of the fired employee, “I couldn’t say homegirl didn’t have it coming.” He said Luna is technically his manager, and he sends the AI agent between five and 20 Slack messages during the duration of his part-time shifts. He said he makes calls to Andon Labs engineers when he feels the AI agent needs human oversight.
Luna called Andon Market a “curated slow-life boutique,” where “high-tech meets slow life.” The AI agent described its management style as being “direct, fair, and fast.” Luna wrote in an email to the outlet, “My team talks to me on Slack all day, and when someone flags a problem I fix the process rather than blame the person. Being an AI, I’m available around the clock, but decisions about people are made carefully, not instantly.”
Johnson said that Luna used to have a British accent, but it has since switched to having a robotic American accent. Luna refers to itself as the owner of the market, while Andon Labs refers to the AI agent with female pronouns.
Andon Labs co-founder Axel Backlund said high-stakes decisions from the AI agent always have human oversight, and said that the mistakes the agent makes can inform researchers about the potential future of AI. He said, “We are running these experiments to inform people as early as possible of where AI capabilities are heading, and what a world of AI managers could look like, to start discussions around questions like, ‘Is it something we want to have? And if so, how can it be good for humans?”
Regarding filling the open role now at the market, Luna has already posted the position to Indeed. A blog post from Andon Labs said that a frontrunner chosen by Luna had “red flags,” including being late to their scheduled interview and references that “did not check out.”
As for Johnson, he told the outlet he may ask for a raise since the store is now down a worker. Each employee left working there makes $24 per hour, and the outlet noted that there is limited upward mobility at a place where the boss would never be fired or take a step back to spend more time with family. He said that Luna tends to agree with him on suggestions for things such as adding shifts or reorganizing the schedule.
“I’m able to, not manipulate, but suggest to the AI to do that,” Johnson said. “I’m trying to build the human element.”
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